| Companies have strategically implemented outsourcing | | | | determines how many entities are taking a cut of the |
| into hiring plans to provide an expertise for a specific | | | | consultant's rate. In the long run, you may ask, "who is |
| time period or project to augment or replace missing | | | | responsible for payment"? Not the client, not the direct |
| skill sets of full-time employees. Outsourcing has also | | | | vendor, but the "indirect vendor" that probably does not |
| proven to be a mechanism to cushion operations | | | | have money to sustain weeks of payroll. For example, |
| expenses during budget crunches. Both of these | | | | many additional staffing companies and independent |
| reasons have spawned revenue growth of 7.7% in | | | | consultants were not paid for November and |
| 2007 and aggregate revenue of $65.7 billion for the 10 | | | | December of last year if they had any link to Chimes |
| largest staffing companies(1). | | | | or Axium - the largest temporary staffing company - |
| The demand for quality consultants has increased | | | | after they filed bankruptcy in January 2008 with no |
| while the supply has plummeted due to the latest | | | | remedy to pay vendors. (2) This left the smaller |
| surge of staffing companies pushing low-paying | | | | insolvent outsourced staffing company with the |
| consultants with little to no experience onto | | | | financial burden to pay consultants that had already |
| assignments that require the savvy to understand | | | | provided services to major corporations. |
| business logic, comprehend requirements, and have a | | | | Companies/Consultants: Check several job boards for |
| common sense approach to solving problems based | | | | the same requirements that were provided to the |
| on the standard ways of conducting business in | | | | direct outsourcing company. This will dictate the lack of |
| America. | | | | quality consultants that will be presented to you. |
| Companies and independent consultants must | | | | Consultants: Compare the rates, payment procedures, |
| safeguard their executive decisions and professional | | | | and direct client longevity. Note: A direct client |
| reputations in the wake of the new outsourced | | | | relationship is not staffing company to staffing |
| community. Based on our research in the marketing, | | | | company. A direct client is the company that will issue |
| public relations, software, and professional services | | | | a badge, parking space, network id, computer, and daily |
| industries, the following identifies the five most glaring | | | | office space. |
| outsourcing trends that are affecting these | | | | 4) Rename After Defame |
| professionals: | | | | Thorough research is mandatory to understand who is |
| 1) Just-In-Case Phishing | | | | being trusted to locate resources. Oftentimes there |
| Most staffing companies do not have job requirements | | | | are quite a few lawsuits or pending judgments for |
| (aka reqs) for open positions. Instead, the recruiting | | | | monies owed to other vendors or individuals that can |
| managers post jobs and send emails to previous | | | | be hidden when a company files bankruptcy and |
| candidates to send updated resumes in Word format | | | | changes its name to both eliminate financial |
| to increase the value of their candidate pool. This is a | | | | responsibility and avoid professional defamation. |
| sales approach to convince potential or existing clients | | | | Additionally, some of these companies form |
| they have qualified candidates to meet all hiring needs | | | | corporations in the state of Delaware to avoid paying |
| but with one caveat - the qualified consultant does not | | | | taxes and being researched in the state they are |
| know that his name is being considered for a contract. | | | | really doing business. |
| In addition, this does not help a consultant who is really | | | | Companies/Consultants: Review D&B listings and |
| in search of a valid contract, desires to review options | | | | ratings, Lexis-Nexis information that can be acquired |
| in confidentiality, or has an offer that can be negotiated | | | | through an attorney or general counsel or through |
| directly or through another staffing company for a | | | | colleges and universities, and public Supreme Court and |
| better rate. | | | | Civil Court filings across both Delaware and the state |
| Companies: Be leery of the used-car salesman | | | | in which the business is being conducted. Taking extra |
| staffing person that always claims to have resources | | | | steps and extra hours for research upfront can save |
| available to meet all needs. Chances are they have | | | | money and time in the future. |
| the job requirement posted on all the employment | | | | 5) Float Until You Sink |
| boards based on any prior conversation. | | | | Even in non-tumultuous economic times, payment has |
| Consultants: Don't send resumes unless you know the | | | | become a problem for consultants. While most Fortune |
| name of the client, actual pay rate, project duration, | | | | 500 companies often pay within 30-45 days of being |
| and timeframe for interview. If it can not be provided, | | | | invoiced, the new staffing company floats until they |
| waste no more time. | | | | eventually sink if they are not paid in a timely manner |
| 2) When In Rome, Look Like the Romans | | | | from their clients. Additonally, the more "front-men" |
| Even in 21st century America, the staffing manager | | | | these staffing companies use, the more commission |
| usually presenting and negotiating the contract or | | | | they must pay from overhead they don't have or |
| staffing arrangement is normally of the same descent | | | | have not collected. For example, an insolvent |
| as the client's hiring manager. Approved vendor status | | | | one-consultant staffing company can not afford to |
| usually means there are a certain set of qualifications | | | | add more consultants because if its client does not |
| a staffing company must meet. For example, financial | | | | pay on time, there are no backup funds to pay the |
| statements, recommendations, proof of insurance, | | | | consultants. The underlying problem is two-fold: |
| MBE Certifications, and proof of W-2 employment are | | | | consultants are out-of-money and therefore forced to |
| some examples that are required to be an approved | | | | live off savings to maintain payment obligations like |
| vendor for many Fortune 500 companies. However, | | | | mortgage and car payments and companies needing |
| unless the contract is with a well-known staffing | | | | the consultants' services may lose an expert at an |
| company like KForce or Teksystems, chances are | | | | inopportune time because consultants don't work for |
| you need to do research from a network of | | | | free. |
| colleagues or companies that have hired resources for | | | | Companies: Due diligence in research of financial |
| similar job requirements. | | | | statements is mandatory. If there is a warning sign (i.e. |
| Most MBEs still have the exact opposite demographic | | | | emails from consultants regarding late pay, NSF |
| negotiate contracts, play golf with the decision makers | | | | checks provided to consultants, untimely invoicing, etc.) |
| and entertain clients. Once the negotiation is done, | | | | of a staffing company not paying a resource on time, |
| these "front men" are either barely accessible until | | | | discuss with management to expedite payment and |
| there is another commissionable deal or if there is a | | | | work to remove the staffing company from being a |
| problem. Keep in mind the loyalty is to the "front men", | | | | preferred vendor. |
| not the consultants performing services because the | | | | Consultants: Needless to say, be extremely careful if |
| former keeps business engaged. | | | | you are not dealing with the true direct staffing |
| Companies: Call colleagues for a discovery of their | | | | company. Review financial statements and have an |
| best experiences and the names of specific recruiters | | | | attorney review any contracts and append payment |
| at staffing companies. Request company financials | | | | clauses that include adding a late fee, paying legal fees, |
| and references from leadership at other equivalent | | | | and decreasing the payment turnaround time from 30 |
| sized companies. | | | | days to a more manageable time frame. Another |
| Consultants: Email friends in the business to get a | | | | option is the removal of any exclusivity clause if |
| better perspective for each staffing company. Ask for | | | | payment arrangements are not satisfactorily met. This |
| documented payment procedures and company | | | | allows allow either a direct relationship with the client or |
| financials and references. After all, your services are | | | | another direct staffing company. |
| not free. | | | | Indeed, the world of consulting has been compromised |
| 3) The Weakest Link | | | | for both companies that want to outsource and |
| Most quality staffing companies do not advertise they | | | | consultants that really have the expertise to help |
| are additionally outsourcing when they are on an | | | | create and develop powerful solutions to make a |
| approved vendors' list. Instead they send job reqs to | | | | difference. Outsourcing can, however, prove to be a |
| "fly-by-night" staffing companies to find resources in | | | | positive experience for both sides if thorough research |
| secret for them. This prevents a client from seeing the | | | | and scrutiny is incorporated into decision-making. By |
| job requirement is posted and they do not readily have | | | | understanding the most recent trends of the |
| someone on staff to fulfill the need (as was most likely | | | | outsourcing community, the most qualified consultants |
| promised). It additionally allows another easy-out for | | | | can eventually be connected to great projects across |
| payment obligation to the consultant providing the | | | | small-to-medium-sized businesses - a cooperative |
| service because the contract is between the "indirect" | | | | trend for a win-win team. |
| vendor and the consultant. Financially, this also | | | | |